http://www.bjreview.com MARCH 26, 2020 BEIJING REVIEW 33
Copyedited by Sudeshna Sarkar
Comments to zhangshsh#bjreview.comBUSINESS
making the work as hard as facing a typhoon
every day,” Ju Zhiguo, Director of Department
of Airline Operation, Xiamen Airlines, said. Ju
has been working till almost midnight every
day since the outbreak and canceled his
holiday.
A greater blow has been the cancella-
tion of ß ights. While business has come to a
standstill, there are still large-scale refunds
to be made for tickets, which has hugely
impacted the cash flow of the asset- and
capital-intensive industry.
According to CAAC, the aviation industry
registered losses of 24.59 billion yuan (3.53
billion) in February. Total air transport turnover
tumbled 73.9 percent year on year to 2.52 bil-
lion tons-km and the passenger throughput
stood at 8.34 million trips, plummeting 84.5
percent from the same period last year.
Not only in China, the global aviation
industry is facing its coldest winter in the
wake of the pandemic. According to a
statement issued by the International Air
Transport Association (IATA) on March 5,
the global airline passenger business is set
to lose 63 billion to 113 billion because
of the outbreak.
“In a little over two months, the industry’s
prospects in much of the world have taken
a dramatic turn for the worse,” Alexandre de
Juniac, Director General and CEO of the IATA,
said in the statement.
The Republic of Korea’s flag carrier
Korean Air reduced its global capacity by
80 percent, UK airline Flybe announced its
collapse while British Airways warned its em-
ployees through an e-mail that its survival
was at stake.
To compound the gloom, the U.S. added
the UK and Ireland on its travel ban list.
Everywhere now, governments and compa-
nies are tightening travel policies, dealing a
hard blow to the global aviation industry.
De Juniac suggested stimulus measures
including “relief on taxes, charges and [air-
port] slot allocation.” If governments cannot
address the problems properly, the whole
industry will face a Ķ nancial crisis, he warned.Finding solutions
The Chinese Government has been rolling out
measures to help the industry tide over the difĶ -
culties. On March 12, CAAC announced 16 new
measures, including increasing infrastructure
investment and cutting corporate costs.
Airlines will be temporarily exempt from
contributing to the civil aviation development
fund, consisting of airport taxes paid by pas-
sengers, and other fees by airlines and aviation
enterprises, while Ķ nancial support will be given
to international air transport and key ß ight mis-
sions for disease control. The fund will subsidize
companies to invest in Ķ xed assets for epidemic
control.
Aviation companies are also strategiz-
ing on their own. Xiamen Airlines told Beijing
Review that to remain proĶ table and promote
development, it is cutting costs, seeking digital
transformation and optimizing core resource
allocation. In addition, it is reTuesting govern-
ment subsidies, having applied for 417 million
yuan (59.4 million).
With the outbreak coming under control
in China and business operations nationwide
resuming in an orderly manner, domestic pas-
senger trips rose by 16 percent in the March
2-8 period compared with the same period last
month. About 40 percent of the normal ß ight
capability has been resumed, Jin Junhao, an of-
Ķ cial with CAAC’s transport department, said on
March 12.
Airports in the industrialized cities of
Shenzhen, Chengdu and ChongTing have
resumed over 60 percent of their normal capac-
ity. By March 11, construction on more than 50
percent of 81 airport projects had resumed andby early April, it is expected to rise to 86 percent,
Jin added.
On March 6, Premier Li KeTiang inspected
the Beijing Capital International Airport (BCIA),
where he said COVID-19 was a common
challenge for the international community.
Cooperation with international organizations,
relevant countries and regions, especially in the
field of air transportation, should be strength-
ened to contain the disease.
He also inspected the aviation distribution
center of SF Holding, a courier giant, where
he emphasized the importance of striving for
smooth logistics to advance economic and so-
cial progress.
CAAC is classifying flights as facing high,
mid and low risk according to the epidemic situ-
ation of the departure countries, the passenger
load and the conditions of the ß ights and tak-
ing safety measures accordingly, Zhu Tao, an
official with CAAC, told a press conference on
March 16.
The BCIA has designated a special zone for
all international flights as well as flights from
Hong Kong and Macao special administra-
tive regions and Taiwan where passengers
have to undergo a health check for COVID-19
symptoms.
Zhao Ying, Vice President of BCIA, said at a
press conference that since March 13, all inter-
national inbound flights of the Beijing Daxing
International Airport have been transferred to
the BCIA.
Airline companies are also implementing
their own measures. Xiamen Airlines started
conducting health checks on international pas-
sengers on January 27 and about a month later,
added more measures like upgrading the safety
eTuipment onboard and strengthening man-
agement of its employees overseas.
While domestic airlines are resuming op-
eration, however, it remains uncertain when
the international airlines that have suspended
ß ights will follow suit.
The recent slump in crude oil prices was
expected to bring some cheer to the industry
as oil accounts for 30-35 percent of airlines’
costs. But analysts said there will be no short-
term beneĶ ts for them as there is a time gap for
crude oil to be processed into aviation oil.
Minsheng Securities, a security brokerage,
has estimated that while the large airlines will
rebound, the small and medium-sized ones
can collapse. This year will see further industrial
integration and concentration of market shares,
which will beneĶ t the large airlines. QMigrant workers take a charter
ß ight of Xiamen Airlines from
Guyuan Liupanshan Airport,
Ningxia Hui Autonomous
Region in northwest China to
Fujian Province in southeast
China on February 27XIN
HU
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